SPARKS. Nev. — Scolari's Food and Drug Co. here said it decided to switch from self-distribution to an independent wholesaler after examining its cost-of-goods in light of the economic pressures it was experiencing.
Scolari's, a 19-store independent, announced earlier this month it would buy most of its wholesale needs through the Stockton, Calif., facility operated by C&S Wholesale Grocers, Keene, N.H.
Ward Dunn, vice president of sales and marketing at Scolari's, told SN last week, “When we started examining our cost-of-goods, we realized the aggregate buying power of a multi-billion-dollar wholesaler could substantially reduce our costs — and we also liked the robust promotional funding programs C&S has in place.”
Scolari's began receiving shipments from C&S at its four Northern California stores two weeks ago and is scheduled to begin getting shipments for its 15 Northern Nevada stores this week, Dunn said.
“So far, we're very pleased with the service levels. C&S has assigned people to our receiving docks to see how the store orders come in, and they will continue to monitor the transition for a couple of months.”
The chain experienced “very few glitches because the IT departments at both companies worked diligently to align themselves,” he said.
“If there had been any serious glitches, we would have delayed the changeover of the Northern Nevada stores, but at this point we're confident the switch will be as smooth and the service levels as high as they were in California.”
Scolari's annual volume for its 19 stores is “just under $300 million,” Dunn said. He declined to say how much savings Scolari's hopes to achieve buying through C&S.
The company has been operating a distribution center here for over 30 years, and at one time served as a wholesaler for other retailers. The facility measures about 200,000 square feet.
Scolari's has a short-term lease that allows it to exit on six months' notice. Dunn said the company hopes to maintain a cross-dock facility for truckloads of in-and-out items.
While Scolari's has contracted to buy virtually all its dry groceries, frozen foods, dairy-deli and baked goods, plus some general merchandise, from C&S, it has not made a final decision on produce and meat, Dunn said.
“We have some produce suppliers close by in California, Washington and Oregon, and we're seriously looking at three different sources of supply, including C&S, for produce. In terms of meat, we have a robust program with Harris Ranch beef products and Foster Farms poultry products that go directly to the stores, so there are some logistical issues we're still looking at in that category.”
Before it selected C&S, Scolari's also spoke with whole cooperatives Unified Grocers, Los Angeles, and Associated Food Stores, Salt Lake City, “and while both were very good, we decided that, being a privately owned company, we would feel more comfortable working with another privately owned company,” Dunn said.